Market update: Investors on sidelines ahead of US non-farm payrolls report – 22.10.2013

Source: Henderson Global Investors

US equity markets finished flat yesterday (S&P 500 -0.1%; Dow Jones -0.05%) as investors hedged their bets ahead of the release of September’s US non-farm payrolls data, which was delayed owing to the government’s partial shutdown. In macroeconomic news, US sales data for existing homes argued against the US Federal Reserve tapering its asset purchases this year; The National Association of Realtors reported that sales of previously owned homes fell 1.9% last month to an annual rate of 5.29 million units, impacted by rising mortgage rates and house prices. In the corporate world, earnings were somewhat lacklustre too. McDonald’s disappointed analysts after announcing sales that fell short of expectations, and on warning that weakness would continue in the fourth quarter.

Overnight, the Shanghai Composite finished 0.8% lower and the Hang Seng slipped 0.5% after the National Bureau of Statistics revealed that average new home prices in 70 major Chinese cities had risen 9.1% year-on-year in September. This is causing speculation that the government may announce new measures to curb property appreciation. Elsewhere, European shares are little changed this morning (FTSE Eurofirst 300 flat; FTSE 100 +0.1%) as investors stay on the sidelines until this afternoon’s US data. Deutsche Lufthansa is among the underperformers after announcing falling operating profits, while Novartis is one of the outperformers after raising its 2013 forecast.